To buy or not to buy, that is probably the most worrying question bothering prospective buyers looking at repossessed houses. Is it a good idea to invest in a repossessed house? What if I end up with the wrong end of the stick? If you are plan to invest in a repossessed property, here’s a quick guide to help you sail through:
Repossessed or distressed properties are those sold by mortgage lenders instead of their debt owed by the homeowner. The lender has taken possession of the property because the owner couldn’t afford to repay the mortgage loan and intends to sell the house.
The bank is obligated to sell the property as soon as possible and recover any loss incurred on the investment. They know that any delay in the sale of the property could contribute to the mounting loss. Distressed properties are often in disrepair because the owner cannot afford repairs. And in some instances, owners abandon the house taking along with them fixtures and fittings. Sometimes, the house is full of junk and garbage, making the property uninhabitable unless it is completely overhauled. They know that they cannot get an asking of their choice, but may have to compromise.
No, not all repossessed properties are worthy of the money claimed by the lender. Sometimes, the bank would hire a professional to make cosmetic changes and increase their chances of earning a good profit. Before you buy a repossessed property make sure you hire a professional to estimate the total repair cost and help you ascertain if the house is worth the price.
An attorney can help prospective owners, especially first-time buyers to navigate the harsh world of repossessed property ownership. They’ll help you avoid unnecessary legal bills and fees charged by the bank. Conveyancing a repossessed house involves a lot of legal hassles. You’ll have to be very smart to learn their tricks, or better still, hire a lawyer to help you sail through.
If you are willing to pay for the property, remember to carry a pre-approved letter. It does not guarantee anything but is enough to convince the seller of your intention. Most estate agents are on first name basis with the bank members. They get firsthand information about repossessed properties. Real estate agents pay in cash and are hence preferred.
